The modulation of transmitter release from synaptic nerve terminals was investigated by intracellular recording in both the presynaptic terminal and the postsynaptic axon at the squid giant synapse. Changing the concentration of extracellular potassium (K) ions controlled the release of synaptic transmitter; increasing extracellular K decreased the amplitude of the EPSP, and decreasing extracellular K increased the amplitude of the EPSP. Repetitive active potentials in the postsynaptic axon results in an accumulation of extracellular K and a reduction in EPSP amplitude. The reduction in transmitter release resulting from repetitive postsynaptic impulses is attributed to the accumulation of extracellular potassium ions. The accumlation of extracellular potassium ions resulting from repetitive post-synaptic activity may thus modulate synaptic transmission and function as an integrative mechanism in the nervous system.